Charlie Munger once said that many people often ask him how to achieve success and how to gain profits in investment. He replied: "If you can just avoid going crazy and never go crazy, you will surpass 80% of people."

Once a person goes crazy, their operational methods are prone to distortion. I believe what Munger wants to convey to us is the same principle: in investment or in life, in being a person, do not go crazy at will, respect common sense, and you will gradually stand out from the masses.

In recent years, I have listened to many lectures, read many books, and read many articles. I have summarized for myself that the most important thing in investment is indeed common sense.

The father of index funds, John Bogle, also said: "We must always remember that we are in an uncertain financial environment, and what we should rely on are common-sense principles."

For those who invest in the stock market, the time facing a low stock market is far longer than the bull market. In such a sluggish market, facing more uncertainty, we may need to use common sense to invest even more.

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Common sense one,

The world's economy is long-term upward, and most of the stock markets are also long-term upward spiraling. Without any basis, do not easily short sell, but follow the pace of the world and look long-term.

Believe in time, when you have high-quality assets (stocks, funds), time will eventually turn into space.

Common sense two,

Cycles are everywhere, and the stock market is no exception. When the economy is overheated, the cold period is bound to come. The economy has ups and downs, the stock market has bulls and bears, and it goes on and on.No one can truly and accurately predict the direction of the stock market, so do not easily trust any forecaster. Even if they once made money for you, it was just a stroke of luck at that time. If you continue to indulge in belief, losses are inevitable.

Invest rationally, follow the footsteps of the majority, and make a relatively low-point investment layout. Over time, you will see the returns.

Common Sense Three,

Don't always want to get rich quickly, maintain a reasonable investment expectation, and maintain a certain patience. Believe in the magic of compound interest. Even with a very strong principal, to continue to make money, it also requires the accumulation of time.

Buffett's long-term annualized return is about 22%. 95% of his wealth was earned after he turned 60. So don't believe in those mysterious lies that invest 10,000 today and can earn 20,000 tomorrow.

The accumulation of wealth by the stock market god also requires time, let alone we are just ordinary people.

Common Sense Four,

The safety of the principal is more important than anything else.Be cautious with any form of leveraged investment. Even if the short-term returns are substantial, exercise extreme caution. For a 1:3 leverage financing, encountering just one 25% adjustment can lead to the risk of a 100% loss of principal.

Leverage is a double-edged sword for experienced investors. For ordinary investors, it's like a double-bladed knife, with risks no matter how it's used.

Common sense rule five:

Avoid crowded places.

Do not follow the trend in investing; use your own analysis and experience to make judgments. For popular products, what is the logic behind their rise? If you can't understand or distinguish why they are rising, it's better not to buy.

Emotional buying will only make you more uncertain about holding on.

Stay sober; we can't make all the money. If you can't understand or see clearly, just give up. Focus on the areas you can understand, and you will eventually gain equivalent returns.

Let's end today's article with a quote from Charlie Munger:

"Berkshire Hathaway has achieved great success, and the Daily Journal has achieved modest success. There is no secret; it's all about pursuing basic morality and sound common sense."

We ordinary people want to succeed.In fact, it is more necessary to respect common sense.